Understanding a company’s culture is a key component that leaders may ignore. When I took on a new role, an updated strategy was cited as top priority. What the team needed was a culture boost. I focused on culture management to change the “delegate up” practices and effectively implement strategy. It's an ongoing process of encouraging people to take the risks associated with making their own decisions, but it's paying off with faster decision-making, improved performance, and higher morale.

Context

Company: SAP

Department/Area: SAP Marketing

Global Headquarters in Walldorf, Germany

Industry: Technology/Business Software

Size: SAP employs nearly 55,000 people in more than 50 countries; More than 1,200 employees in Marketing

Age: Company founded in 1972

Competitive Landscape:

Ranked 24th Most Valuable Global Brand

74% of Forbes 500 companies run SAP software

More than 183,000 customers in over 120 countries

Triggers

Senior members of the team were afraid to make decisions without the boss weighing in which was affecting the team’s overall performance.

Key Innovations & Timeline

In just six months, there was a major change in how my team operated with a few simple changes like removing myself from some of the approval chains, delegating decisions, and publically reinforcing those decisions. Soon after making these changes, there was a situation in which my direct reports recognized a problem with an initiative and found a solution before briefing me and subsequently turned the project into a success.

Challenges & Solutions

The challenges were changing the culture from a “delegate up” mentality and getting the team to feel comfortable with their own decision-making. This story illustrates the situation and how culture management changed the team’s dynamic and improved performance.

Culture Eats Strategy

Remember when you were young, and threatened to run away and join the circus? You bristled under your parent’s oppressive regime; every decision was made for you. They even chose what you had for breakfast.

Remember when you first joined the workforce and longed for the day when you were in charge? Your managers made such stupid decisions. They didn’t even know what was really going on.

If only you were in charge. It’s good to be the king. All successful change management projects require executive support. Strategy starts with the leaders. If you aren’t the lead dog in the sled, the view always looks the same.

Baloney.

Earlier in my career at SAP, I took a new role with a group that was described as in need of a “turn-around” and an “updated strategy and direction”. I was urged to introduce a new mission/vision, strategic objectives, and revised key performance indicators. Exert top down control.

My first few weeks on the job contradicted this advice. I got my first hint of the problem at a meeting I called in New York to meet all of my direct reports from around the world. I invited them to share their complaints with me, and I was surprised at the minutiae of their issues. They seemed like little problems, well below the level that I would have expected from managers with teams of 50 to 300 people. Why wasn't I hearing larger, strategic concerns from this group?

As I got into the job, I noticed that almost every important decision had to be made by me personally. At first I assumed this was because individual employees had little understanding of the company strategy. However, it became apparent that cascading the strategy was unlikely to help because everyone was used to delegating up.

For example, when limited budget forced trade-offs between two high-priority activities, senior members of the team would ask me to make the decision. Even if I asked them for a recommendation, they usually demurred for fear of being wrong or irritating their stakeholders. In addition, it was unheard of to have discussions between members of my inherited management team without me there to adjudicate. Why should they debate, when the boss will ultimately decide?

I came to the conclusion that the organization didn’t need a new strategy to solve its performance problems. While performance hadn’t been up to full potential, the issue didn’t seem to be with processes or structures or metrics. After a couple of years of being told what to do and being discouraged to think for themselves, my new group had a culture problem.

Because most leaders view culture as something soft and intangible, it’s often overlooked when they take a new job. Unfortunately, in my experience, the single biggest roadblock to success for a new leader is not understanding the current culture of his/her new team and clearly articulating how that culture must change. A well-designed and well-implemented strategy will not be effective unless people are motivated to support it. This idea is captured by the mantra “culture eats strategy for breakfast”, popularized during Mark Fields tenure at Ford Motor. In my situation, culture was clearly my job one.

So rather than working on strategy or objectives or metrics, I concentrated on changing the culture. I immediately removed myself from some of the approval chains. I delegated critical and visible decisions to my direct reports and publically reinforced their decisions. I encouraged them to finalize some long-standing issues without vetting them with me beforehand. And perhaps most importantly, I shared all of this with my manager who went out of his way to reinforce the new style.

One of the key cultural shifts was to signal that it was okay to fail. I give myself permission to fail, so why wouldn't I extend the same permission to my staff? I could tell, in my initial meetings with my managers, that there was a fear of retribution if someone took a risk that didn't pan out. So we set out to change that. We made it clear that risks were about decisions, not about the people. A failure could result from a poor decision, but that didn't mean the person was a failure. We have a saying about this: hard on the issues, soft on the people.

Of course, none of this was without some drawbacks. Not all of the decisions that my team made were consistent with my point of view. And I missed some chances to put my own imprint on the group. But the benefits more than outweighed these downsides.

One situation stands out to me. About six months after these changes, my direct reports invited me to an emergency weekend teleconference. A major corporate initiative – which had CEO visibility – was failing. Not only was it late and over budget, but my directs had concluded that it was fundamentally flawed. The US-centric design would not work in other target countries.

Without my knowledge, that week they had taken the core team off the project, installed a new design team, and come up with an alternative strategy. They had even pre-syndicated the change in approach with a few key external stakeholders. While this new approach was less expensive and quicker-to-market than the original, they could not make up for the lost time or budget. Unanimously they asked for permission to go forward with the revised strategy.

I was stunned but approved their request. In the following days, I briefed my boss and the then CEO, both of whom were pleased with our willingness to admit our mistake and move forward. And yes, the project ended up being a big success and possibly contributed to the fact that I was later promoted to CMO.

We've made other changes in the way we communicate to reinforce this cultural shift. For example, about 44% of our staff actively follow our marketing community internal social network, and about 27% are active contributors. I post frequently, and I'm active on the comment threads. And, of course, it doesn't all have to be focused on work. I saw one of my biggest responses -- 67 comments last I checked -- with my year-end post asking people what they were doing for the holidays. It's all part of the ongoing dialog. People sometimes say that culture is a trickle-down thing, but my observation is that it's more erratic than that, less controlled. It moves in all directions.

It’s a few years since we began to implement these changes and the difference in the team’s culture is palatable. There’s a sense of teamwork that didn’t exist before. People don’t wait for the boss to make every decision and don’t assume that I’m always the smartest guy in the room. Yes, we make more mistakes than before but we catch them quickly and our overall performance has significantly improved. Importantly, many of the people who went through this transformation with me are helping me with my latest cultural change. And no one seems to want to run away to join the circus.

Goals, initiatives, and metrics. I have a huge appetite for strategy management. But I never forget that breakfast is the most important meal of the day – it all starts with culture.

As this post is written very much from my own personal point of view, I thought it was important to inject the perspective of my leadership team at the time. Here is what they had to say regarding the impact the culture shift had on their effectiveness and that of their team.

New Behavior

Jonathan immediately created speed and trust by telling his directs, ‘You are a decision-maker and leader of Marketing. Make decisions. Lead. Sometimes you will make mistakes – that’s OK. I will tell you when that happens.’ Basically, this meant you did not need permission before deciding to do something, even something significant that could impact the entire Marketing organization. It also gave you freedom to fail, knowing that it would not be the end of you. He put his trust in the people he assigned to the leadership team in a real way.

In retrospect what Jonathan did was the classic influence model that McKinsey has documented. He fostered conviction that change is possible and we all need to lead with that thought.

Jonathan role modeled the desired behaviors and reinforced them with formal mechanisms such as performance reviews with a significant percentage of bonuses dedicated to "one team" behavior. As a result, he became the standard by which leaders across the company were assessed for their ability to bring the best out of people and when the Chief Marketing Officer job became available he was the preferred choice among his peers.

When you can’t delegate upward you’re faced with making decisions with your peers. No referee. The upside is that we’ve learned to deal with and understand one another’s styles better. I feel like I’ve got some new friends that I depend on every day.

Impact

Jonathan drove the biggest transformation in SAP Marketing in more than five years. In the first two weeks after Jonathan’s initial decision to remove himself from approval flows, we were able to unlock things that had been stuck for six months. Not only did his decision have a profound effect in our velocity, but his management style also empowered and energized the team because we felt like we were witnessing the dawn of a new era.

As a side effect of the culture change, the entire Marketing organization earned a new level of respect within SAP, as the rest of the company recognized that Marketing was more agile and closer to the sales marketing organization than, perhaps, ever before.

The culture shift increased teamwork and interdependencies across the team. For example, I am now working with my peers more than ever. The work is productive and the co-dependency is strong. The outcome of our work may end up shifting resources and responsibilities, yet, we seem to be working together without concern about this. I think our confidence in one another is higher as a result of Jonathan’s leadership style and culture.

Lessons Learned

What I’ve learned during my experience under Jonathan is that the muscle memory of an organization is one of the biggest impediments to change. You may call it culture, but the DNA of an organization can put any strategy to shame.

Here are a few key things I’ve learned working within the new culture:

Strategy is extremely important, but recognize “good” today is better than “perfect” two weeks later.

Change is slow, but speed and urgency of the actions you want to role model are critical.

Public compliance, private defiance is a morale killer and one of the biggest impediments to a leader’s credibility.

Lessons

Culture management and empowerment can improve a team’s performance more than dictating strategy.

Thanks Jonathon for sharing your story, I enjoyed all of the winners stories as they covered a diverse range of transformative experiences at individual, team and company level. I agree with the other commentators here. We all have a role to play in either enabling bureaucratic culture or working towards a different approach that changes this.

What I like about the change you implemented is that you led by example and made changes in behavior and processes that your team could model. You gave the team permission to break free from what was holding them back, put them in the driving seat, appreciated their values and perspectives and were confident in the possibilities that they could create.

In a large networked based company such as SAP this is very important. For all us to contribute to improving our companies culture we can learn from each other from positive examples such as this and help grow the company as the company grows us.

Great post Jonathan. In my experience the situation you describe is fairly common - in organizations with very strong, hands-on leaders, oftentimes nearly all important decisions (and also many non-critical decisions) are sent upwards. The manager unwittingly encourages and perpetuates this type of behavior by insisting to be directly involved in all aspects of day-to-day operations and drowning out the voices of other senior managers.

It's interesting to watch what happens to a team's weekly management meeting when the leader is not available. Does the manager cancel the meeting? Or if he or she encourages the group to meet anyway, are they able to have a productive discussion, and do they have the courage to agree on action plans and move forward, even without the boss's explicit OK?

Sometimes teams will self correct as trust develops in both directions, but by the time this happens it may be too late. What's remarkable in your story is that you realized straight away that you were taking over a group like this, and you decided to take specific actions to change the culture.

I noticed last year during a steering committee meeting that you chaired that even though you clearly had your own point of view on the topics being discussed, you were pointedly seeking the opinions of others and encouraging discussion. Now I understand a little more of the background - thanks for sharing.

Jonathan it is a good case study for the culture - leadership implications. In fact that is the main theme of my BA thesis based on my own organisation. I wonder whether if you would have used the OCAI tool designed by Quinn and Cameron you would have got the the hierarchy score high in the decision delegation by your workers? I know in your case it was a matter of observation and practise that lead you to that quick natural view that empowerment of managers - giving them more supportive freedom can make them more pro-active. Its a really good example of pro-active leadership. I always like to search for examples where leader actually tackles culture and then aligns with strategic goals. Your case I guess improved efficiency in decision making as well. On the other hand let us not forget that unlike prof. Hamel's visionary quest to free us from bureaucracy, that bureaucracy will exist because its embedded in our human culture. What your example clearly shows is that you sensed that you need to balance that bureaucracy in a way in which the level of decision making corresponds to the levels of tasks. Clearly managers at different positions in a highly technical SAP organisation were capable of making their own good decisions without the need to go up the level. However the problem with culture depends on the context - it could be argued that in a highly technological environment such steps are easier to take, as the level of tacit knowledge among staff is high and their understanding of strategy and operations in general are quite broad. In the manufacturing environment were there is a higher amount of less technical skills involved, longer hours of work, less work life balance and so on, trying to delegate power becomes more difficult. Motivation becomes harder because there are more cultural barriers to break not just delegating decision making but a whole packacge of iffs and don't and I know better.

Jonathan's story shows that it is more than just the boss that enables bureaucracy. We all have to be willing to be a boss, get things done, make decisions, and stop gift wrapping ourselves in red tape. We all have to get into motion, to be willing to try something new, something risky, something that is going to make a difference.

What's exciting about this approach to management is that you can start here, start now, and start with what you already have. And Jonathan shows that you can awaken enough people to get rolling so that you are all successful.

We have to do more than just want to go beyond bureaucracy. I think Jonathan’s story shows that it CAN happen anywhere – probably even where you are working. Shine your light on improving your own organization’s culture, because the culture we make, is the culture we get.

As an SAP Marketing employee, I am writing these words straight from the heart. No corporate filter, but rather, more from a personal/professional lens. Just my sincere thoughts.

Through your leadership, not only is the culture of SAP Marketing transforming for the better, but the culture of the entire company is transforming for the better. You don’t just talk the talk. You walk the walk. You live it. You are an exemplary role model for us. A straight shooter. Respectful and respected. A no nonsense guy yet very personable and human. Ultra professional yet approachable. Tough when necessary yet appreciative when deserved. Your bar is very high, as it should be, and you hold yourself to those same high standards. You care, and we know that. That makes us care even more. You care about your people, our customers, and everyone you do business with. You don't just care about doing the right things; you care about doing them right. You make us, as employees, want to be better. Not just better than our competition, but better than our own personal best. You make us want to make you – and the company – proud. You make us want to exceed your expectations of us, and exceed our own expectations of what we ever thought imaginable. You empower us to make decisions, use our judgment, stretch our limits. You hold us accountable in a healthy way. It is liberating and exciting! I am so proud to work at SAP under your leadership and within the culture you are creating.

I wholeheartedly agree. As a strategist I often tell my teams that finding the right answer for clients is less than half the battle. The more formidable challenge is getting them to take action individually and, even harder, take collective action in the same direction.

Jonathan's premise around getting both scale and buy in by demanding them to make decisions, be willing to fail and giving people the room to try, fail and improve is the foundation of creating lasting change. It may not be quick but it is lasting.

Culture eats strategy for breakfast. But culture with strategy is a feast.

Dear Jonathan, I like the title of this story! Was it by any chance inspired by the famous Peter Drucker quote, 'Culture can eat strategy for breakfast'? You story comes to life with the testimonials of your team members.

At that time, I was one of the members of that described group , and Jonathan indeed surprised some of us in our first meeting, both by exposing some hidden "secret cows" and also by removing most of the decision barriers that were blocking us to move faster.
Empowerment started and we had license to move ahead. Sometimes not perfect, but good enough and the reality is that employee satisfaction and stakeholder satisfaction increased significantly.

Thanks for the kind words JP. I really appreciated your "role model" leadership in helping change the culture. Also, you significantly invested in people programs which reinforced the behaviors we were looking for.

You make a good point by highlighting the courage to admit failure. When I interview candidates, I often ask them about their biggest mistake. Many struggle to come up with one (or they are hesitant to admit one). This is usually one sign that they may not fit into the "fail fast and learn" philosophy.

Thanks for the story and a great topic indeed.
Think back to when you were a kid and your parents made every decision for you, sometimes even down to those ugly socks with the embarrassing patterns. When we grow older and join the workforce, for some, managers are like our parents, who we think will always make the right decisions for us. Well, if we go back to those embarrassing and ugly socks we wore when we were younger, then we realize that maybe we should be empowered to give our own input.
What about the child you see wearing the Superman costume to school when it is not Halloween. You know that his parents empowered him to be able to make his own decision, even if it looks a little funny. I bet those children are CEOs or entrepreneurs today.
Jonathan, I admire your decision of empowering people to make their own decisions and I am sure they have taken that change in culture with them forward from that experience.

Jonathan - Patti Fletcher suggested I read this post following a discussion about how to succeed at changing a culture. I'm pleased she did. You present the steps in a clear, simple and straightforward manner. See, decide, do, reinforce. Voila.

Having a team of people who work together to think through and make decisions, is the foundation for success of any strategy. So even if culture doesn't eat strategy, it certainly comes first.

Hope to read about you as the final winner while I'm enjoying a breakfast of culture and perusing the MIx.

I appreciate the encouragement. See, decide, do, reinforce can indeed work. In trying to be a role model for the new culture, I encouraged the team to point out when my actions didn't match my words. If I'm encouraging people to experiment without worrying about failing, I need to be able to fail as well.

Really exciting topic. I second what Kare Christine Anderson said in her comment - this kind of culture change is "the secret to an engaged “workforce” in a social, disruptive world...." Also important is the freedom to fail. In a healthy, self-organizing culture people need to have freedom to push boundaries, experiment, iterate (fail), innovate and then build upon their successes. But failure is not so easy. I’d love to hear others' thoughts on the freedom to fail. How is failure handled in your organization? How do you fail fast? How do you ensure your company learns from failures?

Thank you for sharing this story, Jonathon! I've had the privelege be part of this transformation, and have witnessed firsthand the culture change that has revolutionized SAP Marketing. From 2005 to 2010 I worked with the Marketing organization to help represent them in the Employee Corporate Portal. We were never able to fully realize the presence for Marketing because of pending decisions and reorganizations that might "impact direction". Since then, there has been a 180 degree change. I now work in the Marketing organization and we are empowered to innovate, improve and create. The result of the culture change enables people to move faster, with confidence, to deliver the best results most efficiently. Thank you for driving these changes that have made SAP Marketing one of the best places to work!

Thank you for so clearly articulating an often overlooked and under-appreciated fact of corporate life: all strategy is designed and implemented by people. Whether they are operating within a highly structured, hierarchal organization, a global holding company arrangement or within a small partnership, it’s individual people, with their own personalities, talents, aspirations and fears who drive the business ahead. And it’s the collective culture of a company that determines how independent or hamstrung each employee feels and behaves. People make culture and culture defines the modes of operation.

Three examples jump out from my own experience that underscore these observations and illustrate how culture will always eat strategy. The first involved several years working with a large, global Japanese IT firm, in which all decision making was tightly bound by both outside cultural norms and inside rules of precedence, procedure and policy. Virtually no individual initiative existed. Every decision was delegate up, masked as a collective process.

The second involved the creation and implementation of a global business and marketing strategy led by a single, highly talented, mercurial individual who succeeded by brute force of will until meeting his Waterloo.

The last was living through two mergers between seemingly similar global marketing communications firms that took years of culture wars before developing a business model based on defined goals rather than personalities. There was no delegation up or down or across—only guerrilla warfare.

In each of these examples, culture ate strategy. People behaved in the manner their culture allowed, very often not to the benefit of a strategy or business. Success was either random, short-lived or not at all.

Thanks for sharing these vivid examples of how culture eats strategy. I really like your closing thought "People behaved in the manner their culture allowed, very often not to the benefit of a strategy or business." Culture dictates behavior.

I am a longtime fan of Becher’s innovative work (along with Mark Yolton’s) in supporting SAP in staying agile. This is a must read for any executive who wants their organization to thrive in this increasingly disruptive world.

Supporting a self-organizing culture is more important than strategy, as Becher has proven – and explains here how other businesses can act similarly. It seems obvious to some, yet not all top management yetm that in a complex, connected world where there’s a war for top talent, the key to staying competitive is to recognize, support and reward employees for using their best talents together to solve problems and seize opportunities.

This approach accelerates just-in-time, shared learning, camaraderie and greater accomplishment together as individuals get better at recognizing the best collaboration methods and tools to use for the situation. Those experiences tend to make “our” work more meaningful so “we” becoming higher performing and happier.

That’s the secret to an engaged “workforce” in a social, disruptive world where the Law of Unintended Consequences is increasingly becoming the norm not the exception – so solving the thorny, often expensive “exceptions” that pop up at work becomes increasingly vital to the survival of an organization.

Thanks for tying together two things that hadn't occured to me previously. When I've written about my management style, I reinforce that I manage more by influence (suggesting direction) than by control (enforcing rules).I also believe in management by exception (tell me about exceptional successes or unexpected issues) than management by status (tell me about what you accomplished). As you point out, it's an open, engaged culture that allows this to happen.

Amazing piece. Great to hear stories of success where leaders have the courage to empower and delegate. Building a culture of accountability is a pressing challenge in many of our partner organizations and much of what you have lived is what we advocate for. I'm curious how you publicly advocated for decisions made by your subordinates. What tools/mechanisms did you use to ensure visibility of your support?

As part of our SAP on SAP initiative, we have a host of tools that we use internally that range from portals to dashboards to strategy management. In this case, the most effective mechanisms were team meetings and all-hands calls. In the past, they were top-down guidance from a single voice but we moved to something much more inclusive and interactive. For example, I asked people/teams who had made tough decisions to present. In addition, I often responded "what do you think?" when publicly asked for my opinion. And, of course, I had my boss to reinforce this behavior whenever he interacted with the team.